My ratings on ETFs are unique because they are based on my stock ratings for each of a fund’s holdings.
Analyzing and rating an ETF based on its holdings delivers many interesting insights:
My ratings on ETFs are unique because they are based on my stock ratings for each of a fund’s holdings.
Ergo, the “Most Dangerous” ETFs allocate the most capital to stocks on March’s Most Dangerous Stocks list, which is available for non-subscribers as of today. There are 40 stocks on the Most Dangerous list every month.
Competition for Lipper and Morningstar is "heating up" according to fund-industry expert Chuck Jaffe. Research based on past performance is losing favor as investor recognize its lack of rigor and value.
Investors are good at picking funds with low costs. They are not good at picking funds with good stocks. Both are required to maximize opportunity for success.
The radically higher number of US equity mutual funds (4,700+) versus ETFs (380+) is not indicative of better stock selection from active management. On the contrary, the vast majority of actively-managed funds do not justify the higher fees they charge. They do not, in terms of stock selection and expected returns, add value versus passively managed benchmarks.
Having too many choices can be intimidating. And there are definitely lots of choices when it comes to ETFs. For example, in the equity market alone, there 30+ technology sector ETFs, or 35 ‘large cap value’ and 20 financial ETFs. A very healthy selection abounds for every category of ETF.
The problem is that these ETFs are not made the same even though they may be in the same category. There are major differences in methodologies between funds, which results in drastically different holdings even within a given sector. See Figure 1.
MarketWatch's Chuck Jaffe feature's New Constructs mutual fund rating system, which has a "neutral" rating on the Magellan fund.
Our fund rating system is the same as our stock rating system, which has received many accolades for its predictive power.
The consumer staples and information technology sectors are tops among the ten major sectors. Both get our “attractive” rating. Our Sector Roadmap report ranks and rates all of the 10 sectors. It also benchmarks all sectors against the S&P 500, which gets our “neutral” rating and the Russell 2000, which gets our “dangerous” rating.
Ever wondered what it would be like to evaluate funds and ETFs with the same rigor that you can evaluate individual stocks - that is exactly what we deliver in the our Mutual Fund Rating and ETF Reports. Samples provided
Today we initiated coverage of ETFs for all major sectors and Indices. Free samples of the initiation reports are here. These reports deliver strategic insights into entire sectors and markets.
David Trainer, Founder & CEO
